Two Former Employees Of The Hartford Indicted

June 28, 2007|By EDMUND H. MAHONY; Courant Staff Writer

Two former employees of The Hartford have been indicted for allegedly taking millions in payoffs from a Texas lawyer trying to settle health claims for clients involved in the production or distribution of silica-based products, federal authorities said Wednesday.

The indictment, made public in Houston Wednesday, charges that the two employees persuaded an insurance division of The Hartford Financial Services Group to pay more than $34 million to settle the silica cases. Of that total, the lawyer agreed to channel more than $3 million to the employees in the form of ``bribes and kickbacks,'' the indictment says.

The two employees, Rachel Rossow, 41, of Redding, and John Prestage, 36, of Newington, were arrested Wednesday in Connecticut. Both appeared in U.S. District Court in Connecticut and were released on bond.

Houston lawyer Warren Todd Hoeffner, 42, was arrested in Texas Wednesday and released on bond after being presented in court there.

The 14-count indictment charges that between 2002 and 2004, Hoeffner, general partner in Hoeffner & Bilek in Houston, paid Prestage and Rossow to recommend settlement terms favorable to clients who had claims against The Hartford and companies it insured for silica-related medical disabilities.

Prestage reported to Rossow in The Hartford's claims and legal management services department, which handles claims and lawsuits filed against companies insured by The Hartford, the indictment says. Rossow and Prestage were responsible for managing the claims filed against their accounts and were expected to recommend appropriate methods of settlement.

In a series of allegations, the indictment charges that the two employees agreed to recommend a settlement in the silica cases after Hoeffner told them he would kick back part of the money to them. Rossow allegedly received $2,681,873 in bribes and kickbacks; Prestage allegedly got $764,476. Additionally, Hoeffner collected $5,366,839 in attorney's fees from the settlement.

At the time, Rossow was being paid between $75,000 and $85,000 as a team leader in her claims management department, the indictment says. Prestage was earning between $45,000 and $69,000 as a consultant in the department.

The two, with Hoeffner, are charged with conspiracy, mail fraud, wire fraud, conspiracy to commit money laundering and money laundering.

``There is a presumption of regularity and legality in the business of insurance litigation,'' which, when corrupted, damages our confidence in the integrity of the system,'' Texas U.S. Attorney Don DeGabrielle said in Houston Wednesday. ``These allegations will be addressed by today's indictment and, if proven, represent a serious affront to the lawfulness we expect during the settlement of insurance claims.''

The most serious offenses charged in the indictment carry maximum penalties of up to 20 years in prison and hundreds of thousands of dollars in fines.